ServiceTitan’s Q2 FY26 (May 1 – July 31, 2025) performance demonstrates solid top-line growth and expanding profitability, driven by strong core retention, increased adoption of high-margin add-on products, and favorable operational leverage. Total revenue for the quarter reached $242 million (a 25% year-over-year increase) with Gross Transaction Volume (GTV) expanding to $23 billion. The company continues to deepen its penetration across its $650 billion Serviceable Addressable Market (SAM) through targeted go-to-market strategies, AI-driven platform features, and market tailwinds like private equity consolidation in the trades sector. While the professional services segment continues to operate at a loss due to necessary customer onboarding investments, Non-GAAP operating margin expanded substantially to 12.1%, putting ServiceTitan on a clear trajectory toward its long-term operating margin target of ~25%.
Key Financial Highlights (Q2 FY26)
Total Revenue: $242 Million, representing 25% YoY growth.
Platform Revenue: 26% YoY growth; Platform revenue continues to represent 95%+ of total revenue.
Gross Transaction Volume (GTV): $23 Billion, growing 19% YoY.
Net Dollar Retention Rate: >110%.
Gross Margins:
Non-GAAP Platform Gross Margin: 80.7% (up from 79.7% in Q1 FY26).
Total Non-GAAP Gross Margin: 74% (up from 71.1% in Q2 FY25).
Operating Profitability:
Non-GAAP Operating Margin: 12.1% (expanded from 7.0% in Q2 FY25 and 7.5% in Q1 FY26).
Non-GAAP Operating Income: $29.2 Million.
Customer Scale (As of FY25):
~9,500 active customers.
>1,000 customers generating >$100K in Annualized Billings.
Customers generating >$100K in Annualized Billings represent >50% of total annualized billings.
Strategic Initiatives and Market Performance
Market Opportunity & TAM/SAM:
Total Addressable Market (TAM): ~$1.5 Trillion total trades spend (GTV), representing a $30Bn+ revenue opportunity with full platform deployment.
Serviceable Addressable Market (SAM): ~$650 Billion trades spend, representing a ~$13 Billion revenue opportunity.
Product Ecosystem & Attach Rates:
Comprehensive end-to-end platform spanning CRM, FSM, FinTech, ERP, and HCM workflows.
Suite of 10 specialized Pro Products (e.g., Marketing Pro, Dispatch Pro, Scheduling Pro, Fleet Pro, PropertyIntel, Sales Pro, Convex) designed to drive customer ROI and ticket size.
Titan Intelligence (AI Capabilities):
Embedded AI automation that leverages proprietary customer data to optimize real-time dispatching, technician routing, scheduling availability, and marketing ad spend.
Industry Tailwinds & Go-to-Market Engine:
Capitalizing on Private Equity consolidation within the trades, driving standardized software adoption across larger contractor networks.
Efficient acquisition strategy maintaining a 20-month Customer Acquisition Cost (CAC) payback period.
Challenges
Professional Services Margins:
Non-GAAP Professional Services and Other Gross Margin stood at -81.8% in Q2 FY26 due to the essential upfront investments in customer onboarding, implementation, and training required to drive long-term platform adoption.
GTV Seasonality:
Gross Transaction Volume and usage-based FinTech revenue experience seasonal peaks in Q2 during warm-weather service months, creating sequential variations in later quarters.
CAC Payback Horizon:
The 20-month CAC payback period requires disciplined upfront capital deployment before the full multi-product expansion benefits are realized.
Outlook
Long-Term Non-GAAP Target Operating Model:
Non-GAAP Gross Margin: Target of ~77% (up from 74% in Q2 FY26).
Sales & Marketing Expense: Target of 20%–22% of revenue (down from 23% in Q2 FY26).
Research & Development Expense: Target of 20%–22% of revenue (down from 25% in Q2 FY26).
General & Administrative Expense: Target of ~10% of revenue (down from 14% in Q2 FY26).
Non-GAAP Operating Margin: Target of ~25% (expanded from 12.1% in Q2 FY26).
